The impact of acquisition activity on IPO long-run performance: evidence from Europe

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dc.contributor Aalto University en
dc.contributor Aalto-yliopisto fi
dc.contributor.advisor Önal, Bunyamin
dc.contributor.author Eloholma, Tuomas
dc.date.accessioned 2017-08-17T08:47:33Z
dc.date.available 2017-08-17T08:47:33Z
dc.date.issued 2016
dc.identifier.uri https://aaltodoc.aalto.fi/handle/123456789/27694
dc.description.abstract The role of acquisitions in the initial public offerings’ (IPOs’) performance has been studied widely in the U.S. but rather little within European markets. This thesis researches 5,052 European IPOs from 1990 to 2009 to find out whether the acquisition activity influences the long-run performance of newly public firms. Using calendar and event-time approaches, I concluded that the post-IPO acquirers experience significantly poorer performance in the years 2-6 after the issue compared to the non-acquirers group. The non-acquirers earn a Fama-French three-factor monthly alpha of 0.81% while acquirers earn only a monthly alpha of 0.19% during the period. The mean differences in cumulative returns for these groups supports this finding as they are significant for the years 4-6 after the IPO. The results confirm that the management of the IPO firms are exposed hubris and overconfidence when making acquisition decisions shortly after going public as well as investors are exposed to over optimism about these acquisitions. The results indicate as well that acquisitions play an important role in the well-documented IPO long-run underperformance also in Europe. en
dc.format.extent 22
dc.format.mimetype application/pdf en
dc.language.iso en en
dc.title The impact of acquisition activity on IPO long-run performance: evidence from Europe en
dc.type G1 Kandidaatintyö fi
dc.contributor.school Kauppakorkeakoulu fi
dc.contributor.school School of Business en
dc.contributor.department Rahoituksen laitos fi
dc.subject.keyword initial public offerings en
dc.subject.keyword acquisitions en
dc.subject.keyword long-term perfomance en
dc.subject.keyword Europe en
dc.identifier.urn URN:NBN:fi:aalto-201708176598
dc.type.ontasot Bachelor's thesis en
dc.type.ontasot Kandidaatintyö fi
dc.programme Rahoitus fi


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